BOT expects US on way to recovery, but CIMB Thai exec says QE to continue
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The Bank of Thailand expects the US economy to recover eventually, while a CIMB Thai Bank executive forecasts that the US Federal Reserve will maintain its bond-buying programme this year because of unsatisfactory economic figures.
Parisun Chantanahom, BOT senior director for its International Department, said the US economic figures announced recently met the expectations of many and the Thai central bank believed the United States would recover sooner or later.
In the second quarter, US gross domestic product expanded 1.7 per cent year on year, higher than market expectations.
He said that in its most recent statement the Fed had not signalled a specific period for a reduction of its stimulus, unlike its previous statement that made markets more volatile.
The Fed said on Wednesday that persistently low inflation could hamper economic growth, and it pledged to keep buying US$85 billion (nearly Bt2.7 trillion) in bonds every month, according to Bloomberg.
“The Fed moved back slightly to the dovish side,” Bloomberg quoted Evan Lucas, a Melbourne-based market strategist at IG Markets Ltd, a provider of trading services for equities, currencies and commodities, as saying.
“The US economy does look like it’s growing a bit stronger and the Fed hasn’t said when it will announce tapering.”
Banluesak Pussarangsri, executive vice president of CIMB Thai Bank, said that in his personal view the US economic figures were not yet satisfactory, and this could be a reason behind the Fed deciding to wait for the rest of this year’s figures before deciding on tapering the quantitative-easing (QE) programme.
The Fed is unlikely to reduce its bond purchases this year, he said.
“We have to monitor the figures. We expect the Fed to look at the figures in the third and fourth quarters. If the figures improve, the Fed may reduce its QE next year,” he said.
Market pressure remains with lower-than-expected economic-growth rates in Asean countries including Thailand, he said.
